Prime Minister Andy Burnham (Image: Getty)
When Andy Burnham became Prime Minister he promised “good growth in every postcode”. With one in four postcodes being rural, the Autumn Budget is the first true test of that pledge.
The Countryside Alliance has written to the Chancellor with ten practical measures spanning farming, local enterprise and winter fuel costs. Every proposal provides this government an important opportunity to reset its relationship with the countryside.
A new Prime Minister and Chancellor present a fresh opportunity to do things differently. Express readers will be all too aware of the breakdown between Westminster and the countryside.
Over the past two years, rural communities have faced a staggering 27 damaging policies. From imposing inheritance tax on farmers and agricultural businesses, to plans to ban trail hunting and restrict game shooting, many in the countryside have been left feeling targeted.
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Rural Britain contributes over £300 billion annually to the economy and supports four million jobs. Its people are a vital driver of national growth, not a problem to be managed.
John Healey has an opportunity to ease the burden on rural people and help unlock growth. This Budget is the moment to show rural communities that the government is listening.
Rural campaigner Mo Metcalf-Fisher (Image: JONATHAN BUCKMASTER)
Farming families who have worked the same land for generations want nothing more than to pass it on. Raising the inheritance tax threshold to £2.5 million was a welcome partial concession, but too many farmers are still suffering, unable to make vital decisions about their livelihoods.
This disastrous, cruel tax belongs in the dustbin of history. Meanwhile, the Sustainable Farming Incentive scheme ran out of funds within six hours of opening, leaving countless farmers stranded. The Chancellor must revisit both to restore confidence across agricultural communities.
Additionally, one in ten farmers have added holiday lets to their businesses, renting outbuildings to tourists in an effort to make ends meet. Reported plans to tax holiday lets as second homes would render sound rural businesses unviable and damage visitor numbers. It would mean the properties become liable for council tax, adding thousands of pounds to their running costs and wiping out almost all profits.
For those living miles from the nearest GP surgery, school, or supermarket, a car is not a luxury. It is an absolute necessity. With petrol prices soaring, rural families and businesses pay heavily just to go about daily life. Holding the temporary 5p fuel duty cut is no longer enough. Making it permanent, alongside a temporary VAT reduction on fuel, would offer immediate, tangible relief. Furthermore, off-grid homes reliant on heating oil must not be overlooked while electricity VAT is cut. Scrapping VAT on heating oil entirely would ensure rural households are not left out in the cold.
Village pubs, farm shops and country hotels form the backbone of often fragile rural communities across the country, yet they face immense challenges. If lowering the 15 per cent Employers’ National Insurance rate is impossible, restoring the Secondary Threshold to £9,100 would ease pressure on labour-intensive employers. Extending business rate relief to rural hospitality, cutting VAT to offset new visitor levies and restoring commercial vehicle status for double cab pickups – the countryside’s favourite workhorse – would ease pressure on many rural workers.
Finally, horseracing, Britain’s second most popular spectator sport, supports over 85,000 jobs. Reforming the Horserace Betting Levy and removing unnecessary friction from affordability checks – which have the potential to devastate the industry – will safeguard both the sport and the wider rural economy.
No single Budget can fix every challenge overnight. However, if the government genuinely seeks growth in rural postcodes as well as urban ones, it must act now. The countryside is ready for a reset. This Budget will reveal whether the government is ready too.
Mo Metcalf-Fisher is the director of external affairs at the Countryside Alliance
The Countryside Alliance has outlined ten measures it wants the government to introduce in the Autumn Budget to support rural communities, farmers and countryside businesses. The proposals include changes to fuel duty, heating oil VAT, inheritance tax relief, employers’ National Insurance and support for rural hospitality and horse racing. The organisation argues that rural areas face distinctive financial pressures that require a targeted response. <Link url=”https://www.countryside-alliance.org/news-content-type/ten-budget-demands-to-back-rural-britain” title=”Read the Countryside Alliance’s ten Budget demands”/>.
1. Make the 5p fuel duty cut permanent
For many rural households, driving is not simply a matter of convenience. Long distances between villages, workplaces, schools, hospitals and supermarkets can make a car essential for everyday life.
The Countryside Alliance wants the government to make the existing 5p-per-litre fuel duty reduction permanent. It also proposes a temporary reduction in the standard 20% VAT rate on fuel as an emergency response to rising costs.
Supporters argue that these measures would provide immediate relief to rural families and businesses that have limited access to public transport.
The government would need to consider the cost to the public finances and how any reduction would affect prices at the pump. It would also need to determine whether fuel tax changes provide sufficient support to the households most affected by transport costs.
2. Scrap VAT on heating oil
Thousands of homes in rural Britain rely on heating oil because they are not connected to the mains gas network.
These households can face considerable expenses during winter, particularly when international energy prices rise. Unlike households that can access alternative heating systems, some rural residents have limited immediate options.
The Countryside Alliance wants VAT on domestic heating oil reduced to zero, arguing that rural households should not be left behind when the government introduces measures to reduce energy costs.
Such a change could provide direct assistance to households that depend on oil-fired heating.
However, the government would need to consider the effect on public revenue and whether additional support should be targeted at households experiencing fuel poverty.
3. Reconsider the family farm inheritance tax changes
Agricultural inheritance tax has become one of the most contentious issues affecting rural communities.
Farmers argue that the value of agricultural land and machinery can make an estate appear wealthy on paper, even when the business generates relatively limited cash income.
They warn that inheritance tax liabilities could force some families to sell land or assets to pay a bill, making it harder to pass farms from one generation to the next.
The government has already raised the relevant relief threshold to £2.5 million under the policy described in recent reporting. Nevertheless, campaigners want ministers to reconsider the changes further and protect more family farms.
They argue that succession planning is essential for the future of domestic food production and rural employment.
Ministers must balance those concerns against the objective of ensuring that valuable estates make a contribution to public finances. Any revision would need to clarify which farms qualify for relief and how the policy would affect different types of agricultural business.
4. Restore confidence in farming support schemes
Farmers also want greater certainty over government funding for sustainable agriculture.
Schemes intended to support environmental improvements, soil health, wildlife habitats and responsible land management can help farmers diversify their income while protecting the countryside.
However, uncertainty about the availability of funding makes it difficult for businesses to plan investments and commit to long-term projects.
The Countryside Alliance wants the government to revisit the Sustainable Farming Incentive and address concerns about the availability of support.
A predictable system would allow farmers to make decisions about their land, equipment and workforce with greater confidence.
It could also help the government achieve environmental objectives by encouraging participation in schemes that reward sustainable practices.
The challenge is to establish a funding model that is financially sustainable while remaining accessible to farms of different sizes and types.
5. Ease National Insurance costs for rural employers
Rural businesses often operate with small workforces and limited profit margins. A village pub, farm shop, guesthouse or agricultural supplier may depend on a relatively small number of employees to remain open.
The Countryside Alliance is calling for relief from employers’ National Insurance costs. Its proposals include reducing the headline rate or restoring the secondary threshold to £9,100.
Campaigners argue that lower employment costs could help businesses retain staff, recruit additional workers and avoid passing rising expenses on to customers.
The government, however, would need to assess the cost of any changes and decide how best to target support.
The impact may differ between labour-intensive hospitality businesses, agricultural employers and larger rural companies.
A carefully designed policy could help viable small businesses without providing unnecessary subsidies to employers that do not require assistance.
6. Protect village pubs and rural hospitality
Village pubs, restaurants, hotels and other hospitality businesses often provide more than food and accommodation. They can serve as social centres, employers and important parts of the local visitor economy.
When such businesses close, the consequences can extend beyond lost jobs. Residents may lose a meeting place, visitors may have fewer reasons to stay in an area, and other local businesses may experience reduced demand.
The Countryside Alliance wants the government to extend appropriate business rate relief to rural hospitality businesses.
It has also called for changes to VAT arrangements to offset the impact of new visitor levies where these apply.
The objective is to prevent rising costs from making otherwise viable rural businesses uncompetitive.
Any relief would need to be assessed against the public cost and designed to reach businesses facing genuine financial pressure.
The government could also consider the wider contribution that hospitality makes to rural tourism, employment and community life.
7. Protect rural businesses that use commercial vehicles
Many farmers, tradespeople and rural contractors rely on double-cab pickup trucks because they can carry equipment while providing transport for workers.
The Countryside Alliance has called for the restoration of commercial vehicle treatment for these vehicles, arguing that the tax arrangements can have significant consequences for businesses that use them as working tools.
For rural employers, the distinction between a commercial vehicle and a vehicle treated differently for tax purposes can affect operating costs and purchasing decisions.
The government would need to establish clear criteria that distinguish genuine business use from personal use.
A predictable tax system could help companies plan vehicle purchases and manage expenses without creating unnecessary complexity.
The wider objective is to ensure that tax rules recognise the practical requirements of agricultural and rural work.
8. Reform the Horserace Betting Levy
Horse racing supports employment across racecourses, training yards, breeding operations, transport businesses and associated rural industries.
The Countryside Alliance argues that the financial pressures facing British racing threaten this wider economic network.
It wants reform of the Horserace Betting Levy, which provides funding connected to the sport, and argues that the system should reflect changing betting patterns and the industry’s financial needs.
The organisation has also raised concerns about affordability checks that it believes could discourage betting and reduce revenue flowing into racing.
Any changes would need to balance the financial sustainability of the sport with consumer protection and responsible gambling safeguards.
The government would need evidence about the levy, betting behaviour and the effect of proposed reforms before deciding how the system should operate.
9. Make rural transport and infrastructure a priority
Tax relief alone cannot resolve every problem facing rural Britain.
Communities also need dependable public transport, accessible healthcare, reliable broadband and mobile coverage, and roads that connect residents with employment and essential services.
The government’s own Future of Rural England report has identified transport, digital connectivity, affordable housing and access to services as important factors in the prosperity of rural communities.
A stronger infrastructure programme could help rural businesses reach customers, enable residents to access employment and education, and make it easier for people to remain in the places where they have family and community connections.
The government should therefore ensure that national investment decisions take rural needs into account rather than relying solely on the population size of a particular area.
That means assessing the practical benefits of projects for villages and smaller towns, where a relatively modest investment can sometimes make a substantial difference to accessibility.
10. Ensure rural communities have a voice in government decisions
The final demand is broader than a single tax reduction or funding announcement. Rural campaigners want ministers to consider the consequences of national policies before implementing them.
A decision that works well in a large city may have very different effects in a remote village. Residents may have fewer transport alternatives, businesses may face higher delivery costs, and access to public services may require longer journeys.
The government could strengthen its approach by requiring departments to assess rural impacts systematically and consult local communities when developing policies.
It could also improve coordination between central government, councils, farmers, businesses and voluntary organisations.
The aim would be to prevent rural communities from being treated as an afterthought when decisions are made about housing, energy, taxation and public services.
The Budget will be a test of the government’s rural strategy
The ten proposals provide a clear picture of the pressures rural campaigners want the government to address.
Fuel and heating costs remain immediate concerns, while farming businesses are seeking certainty over inheritance tax and agricultural support. Rural employers want help with employment expenses, and hospitality businesses want a financial framework that allows them to remain viable.
Infrastructure and representation are equally important. Rural communities need access to services and investment if they are to contribute fully to national economic growth.
Not every demand can necessarily be implemented in a single Budget. Each measure has financial implications, and ministers must consider the effect on public revenue alongside the benefits to households and businesses.
Nevertheless, the proposals offer a practical framework for evaluating whether the government is taking rural concerns seriously.
For Andy Burnham and Chancellor John Healey, the challenge is to show that promises of growth in every postcode extend beyond major cities and include the villages, farms and market towns that form an important part of Britain’s economic and cultural landscape.
The ultimate test will be whether Budget decisions improve the everyday realities of rural life: the cost of travelling to work, heating a home, running a farm, employing staff and keeping local businesses open.
The countryside’s future will depend on more than political declarations. It will require a consistent approach to taxation, infrastructure, agriculture and environmental protection that recognises the different challenges rural communities face.
The Autumn Budget gives the government an opportunity to demonstrate how those priorities will translate into action.